Trump called on a Federal Reserve governor to resign over an accusation of mortgage fraud while the governor, Lisa Cook, refused to leave her post. Trump repeatedly attacked Fed Chair Jerome Powell for not cutting the short-term interest rate and even threatened to fire him. Powell emphasized caution, noting the Fed wants to see how tariffs affect the economy and inflation. Trump demanded rate cuts to spur growth and lower federal borrowing costs and accused Powell of mismanaging a $2.5 billion renovation. Forcing out Fed leaders would threaten long-standing central bank independence valued by economists.
Powell, who will speak Friday at an economic symposium in Jackson Hole, Wyoming, says the Fed wants to see how the economy responds to Trump's sweeping tariffs on imports, which Powell says could push up inflation. Powell's caution has infuriated Trump, who has demanded the Fed cut borrowing costs to spur the economy and reduce the interest rates the federal government pays on its debt.
The Fed wields extensive power over the U.S. economy. By cutting the short-term interest rate it controls - which it typically does when the economy falters - the Fed can make borrowing cheaper and encourage more spending, accelerating growth and hiring. When it raises the rate - which it does to cool the economy and combat inflation - it can weaken the economy and cause job losses.
Collection
[
|
...
]